October Morning Session

Transcription

1 October 2017 Morning Session

2 Disclaimer: Forward Looking Statements This presentation/announcement may contain forward looking statements with projections regarding, among other things, the Group s strategy, revenues, earnings, trading profit, trading margin, finance costs, tax rate, capital expenditure, dividends, cash flow, net debt or other financial measures, the impact of foreign exchange fluctuations, the impact of raw material fluctuations and other competitive pressures. These and other forward looking statements reflect management expectations based on currently available data. However, actual results will be influenced by, among other things, macro-economic conditions, food industry supply and demand issues, foreign exchange fluctuations, raw material and commodity fluctuations, the successful acquisition and integration of new businesses, the successful execution of business transformation programmes and other, as of today, unknown factors. Therefore actual results may differ materially from these projections. These forward looking statements speak only as of the date they were made and the Group undertakes no obligation to publicly update any forward looking statement, whether as a result of new information, future events or otherwise. Kerry

3 Chief Executive Officer

4 Today s Plan Overview & Strategy Taste & Nutrition Consumer Foods The Clean Label Opportunity Leading in Foodservice Expanding in Developing Markets Kerry inspired lunch introduced by our award winning culinary team Key Takeaways Financials Q&A Future of Food 2025 Kerry

5 Sustained Performance

6 Kerry Leading to Better over the past 45 years Our Food & Beverage Heritage Kerry

7 Consistent Sustainable Performance Delivery 6, * Before brand related intangible asset amortisation and non-trading items (net of related tax) Kerry

8 Kerry Group Today Financial Results as of FY2016 Enterprise Value as of 9 October 2017 Kerry

9 Increase in Global Food demand by PEOPLE TO FEED BY OF THE POPULATION WILL BE

10 Our Marketplace Our Business Model Our Structure for Growth Our People

11 Consumer Revolution Driving Unprecedented Fragmentation Source: Kerry analysis & insight, The Brookings Institution Kerry

12 Kerry - Positioned to Win Across the Global Marketplace Balanced customer set between global, regional & local customers Broad customer base with no reliance on any one customer Kerry Business Model delivering right across all market sectors and geographies Local Regional Top 10 Globals Smaller Globals Local Top 10 Globals Regional Smaller Globals Local Regional Top 10 Globals Smaller Globals Source: Kerry Internal Estimates, Euromonitor, RTS Food Trending, MC Allegra, Technomic, Globaldata Kerry

13 Kerry s Unique Taste & Nutrition Positioning Through a simple product lens, we provide integrated solutions Value-add Offering Kerry

14 How Kerry is Leading to Better Through Our Customers Lens, Kerry Offers Way More Value-add Offering Kerry

15 Kerry Business Model Consumer, Customer, Sensory & Analytical, Market and Regulation Kerry

16 Kerry Business Model Dairy, Savoury, Smoke & Grill, Citrus, Tea & Coffee, Beverage & Sweet Farm ingredients and third party commodities Consumer Proteins, Fibre, Enzymes, Probiotics, Fermented Ingredients, Texturants Consumer, Customer, Sensory & Analytical, Market and Regulation Kerry

17 Our Structure for Growth Kerry

18 People The Heartbeat of Kerry Kerry

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20 Strategic Priorities for Growth Kerry

21 Strategic Targets ( ) On average across the 5 years Taste & Nutrition 4% to 6% p.a. Taste & Nutrition 40 bps p.a. Consumer Foods 2% to 3% p.a. Consumer Foods 20 bps p.a. Group 3% to 5% p.a.** Group 30 bps p.a. ** Assumes 2% above market growth Adjusted EPS Growth* 10%+ p.a. ROACE 12%+ Cash Conversion > 80% Relative TSR Outperforming Peers *Assumes constant currency I TSR = Total Shareholder Return I Cash conversion is expressed as a percentage of adjusted earnings after tax Adjusted EPS and ROACE are calculated before brand related intangible asset amortisation and non-trading items (net of related tax) Kerry

22 M&A Strategy Scalable Business Model Kerry

23 Leading to Better Kerry

24 President & CEO Kerry Taste & Nutrition

25 Kerry Taste & Nutrition President & CEO Kerry Taste & Nutrition Chief Strategy Officer Kerry Taste & Nutrition Kerry

26 Kerry

27 Today Kerry is Positioned to Play Right Across the Global Marketplace Key Insights Profound consumer led food revolution at unprecedented pace Highly fragmented marketplace Projected short to medium term market growth of 1-3% Kerry s Holistic Business Model delivering right across all market sectors and geographies Local Regional Top 10 Globals Smaller Globals Local Top 10 Globals Regional Smaller Globals Local Regional Top 10 Globals Smaller Globals Source: Kerry Internal Estimates, Euromonitor, RTS Food Trending, MC Allegra, Technomic, Globaldata Kerry

28 * In the new structure Kerry

29 Taste & Nutrition End Use Market & Business Profile 16% Meat 12% Bakery & Confectionery 12% Cereal, Sweet & Other 12% Meals 15% Food Service Chain 8% Food Service Independent Operators 2% Food Service Convenience 75% Retail 9% Dairy 7% Snacks 27% Beverages 5% Pharma Kerry

30 Our Taste & Nutrition Evolution Unique & Differentiated Consumer centricity, insights & relevance Global scale & depth of expertise Agility & speed Local execution Growth & value creation Kerry

31 Kerry Taste & Nutrition Kerry

32 Shifting Sources of Consumer Driven Growth A Changing World Europe North America 1% 6% 64 Central & South America 18% 35 Middle East & North Africa 48% Sub-Saharan Africa 86% Asia Pacific 153% Total % Growth Source: The Brookings Institution, The U.N. Kerry

33 The Global Opportunity in Nutrition, Health & Wellness & Clean Label Source: Euromonitor, Mintel, Kerry Analysis * % represent CAGR ( ) of new product launches tracked with a clean label claim Clean label claims: no additives/preservatives, natural, organic or GMO free Kerry

34 Digital Engagement is Shaping Consumer Behaviour and Opening New Routes to Market Kerry

35 Global Regulatory Trends Transparency, Food Safety, Regulation US FSMA China s CFDA & Food Safety Law Mexico, France, Denmark, Finland, South Africa, Thailand and Hungary US California, Pennsylvania and Illinois implemented state level sugar taxes Australia: Governmental campaigns to reduce sugar across all categories Agencies in many developing countries are establishing and strengthening regulatory regimes local understanding and response is critical Kerry

36 Global Foodservice is a Key Consumer Driven Growth Channel APMEA ROW Source: Kerry internal estimates, Euromonitor, MC Allegra, Globaldata Kerry

37 Fragmentation, Select Premiumisation and Value are Re-Shaping the N. America Customer and Channel Landscape Premium: New Brands Driving Growth Core: The Squeezed Middle Value: Meeting Minimum Incomes Largest National and Regional Chains (>100 outlets) Smaller Chains, Independents, Restaurants, Broad Line Convenience National Chains and Many Independents Source: Nielsen, NRA, Technomic, Company Reports, Kerry analysis * Select, smaller players growing rapidly Kerry

38 Consumer Revolution Driving Unprecedented Fragmentation Source: Kerry analysis & insight, The Brookings Institution Kerry

39 Kerry Taste & Nutrition Kerry

40 Kerry Business Model - Overview Consumer, Customer, Sensory & Analytical, Market and Regulation Kerry

41 Kerry Business Model Dairy, Savoury, Smoke & Grill, Citrus, Tea & Coffee, Beverage & Sweet Farm ingredients and third party commodities Consumer Proteins, Fibre, Enzymes, Probiotics, Fermented Ingredients, Texturants Consumer, Customer, Sensory & Analytical, Market and Regulation Kerry

42 Kerry Taste & Nutrition Our Unparalleled Go-To-Market Footprint Kerry

43 Kerry Taste & Nutrition Our Product Process Technology Capability Kerry

44 Kerry Taste & Nutrition Kerry

45 Strategic Priorities for Growth Kerry

46 Our Taste & Nutrition Strategic Priorities for Growth Kerry

47 Leveraging and Strengthening our Unique Industry Leading Foundational Technologies Kerry

48 Kerry Business Model Delivering Above Market Growth Rates * On average across the 5 years of the plan Kerry

49 Kerry Leading to Better Consumer, Customer, Sensory & Analytical, Market and Regulation * On average across the 5 years of the plan Kerry

50 Leading to Better Kerry

51 CEO Kerry Foods

52 Agenda Kerry

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54 Global Trends Influencing the Growing Consumer Spaces Eating Out of Home Easy Meals Snacking Food-to-go Hot & Cold Solus Eating Healthy Solutions Chef s Aids Protein Power Mobile World Drive for Convenience Free From Meat Alternatives Millennials Seniors Authenticity Perfect Portions Kerry

55 Channel Proliferation Driving Significant Change in Grocery Landscape Hyper/Supermarkets Convenience Discount Other Source: TNS Worldpanel Hypermarkets Supermarkets Convenience Discount Online Other Source: IGD Research, UK Channel Opportunities 2017 Decline of supermarket Growth of convenience Rise of discounters Increase in online purchases Food on the go flourishing Source: IGD/TNS Worldpanel Kerry

56 Multi-channel Shopper Behaviour Driving Real Opportunity in the Food Space Coffee specialists Online QSRs (Quick Service Restaurants) Discounters Food-to-go specialists Convenience Convenience, Forecourt & other retailers Supermarkets & Hypermarkets Supermarkets & Hypermarkets Source: IGD 2017/Nielsen/Kantar 2016/Kerry estimate* Kerry

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58 Consumer Foods at a Glance Kerry

59 Leading the Way in Chilled Foods #1 Sausage Brand GB and Ireland #1 Cooked Meats Brand Ireland #1 Dairy Spreads Brand in Ireland #1 Cheese Brand in Ireland #1 Customer Brand Dairy Spreads in GB #1 GB Customer Brand Convenience Meal Solutions #1 Kids Cheese Snack Brand in GB #1 Meats Snack Brand in GB Source: Nielsen/Kantar Kerry

60 Consumer Foods Strategic Value Creation Model Supermarkets & Hypermarkets Convenience Discounters Online Coffee Specialists QSRs (Quick Service Restaurants) Food-to-go Specialists Convenience, Forecourt & Other Supermarkets & Hypermarkets Kerry

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62 Strategic Priorities Implement Cost Optimisation Programme focused on; Simplification Prioritisation Pace Efficiency to fuel topline growth and margin expansion 2. Mitigate Brexit Challenges Address business structural issues over time 1. Deliver our cash conversion target of 100% through; - Strong asset footprint - Efficient capacity utilisation - Tightly focused capital expenditure - Capability optimisation (process and talent) 2. Strong Return on Assets - Leverage existing footprint Kerry

63 Driving Growth & Winning in Chilled (Everyday Fresh and Convenience Meal Solutions) Kerry

64 And Expanding Into Fast Growing Adjacencies Eating Out of Home Solus Eating Healthy Solutions Millennials Seniors Kerry

65 Consumer Foods: Strategic Priorities for Growth On average across the 5 years * Average over 5 years Kerry

66 Brexit Challenges & Opportunities 1 2 Uncertainty Consumer sentiment Outcome Tariffs 1 2 KerryExcel Cost optimisation programme Address structural business issues over time 1 2 Strong UK footprint Targeted business wins More competitive than Euro based players 3 4 Labour Currency 3 Reduce transaction currency exposure 3 Export Euro to Euro Sterling to Euro Kerry

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68 Financial Targets * Average over 5 years Kerry

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70 Leading to Better in Chilled * Average over 5 years Kerry

71 Leading to Better Kerry

72 October 2017